Using just Blender to make cloth assets on a model in UE4?
I'll comment since I've figured this out, in case someone else is as clueless as I was. So, I modeled each part of the object, IE the dagger and the cloth. IN BLENDER, I gave the cloth and the dagger each a material (didn't change any settings). Combine them, export them and texture them, whatever. I didn't add bones or anything. 

In UE4, all I did was import it as a skeletal mesh, and opened it up. Having a material on each the dagger and the cloth allowed me to select them separately in UE4 and thus "create cloth from asset" in the engine. 

I could apply the Material I made for the combined object to both the cloth and the dagger, and it looked fine. The only purpose the material in Blender served was to allow me to select the cloth separate from the dagger in UE4. https://www.youtube.com/watch?v=MC2UlF3BWhQ&amp;t=0s&amp;index=31&amp;list=WL This video although low quality, is what helped me figure it all out.